Mortgage Loan Officer Commission Structure

How Are Mortgage Loan Officers Paid?

Before we explain how Mortgage Loan Officers (MLOs) are paid, let’s check out what you stand to earn as an MLO. Not only do Mortgage Loan Officers enjoy excellent job security, but their annual income varies depending on how many hours they dedicate to working, the mortgage rates in their area, and their commission agreement. In other words, MLOs have the unique ability to earn a hefty paycheck.

As of 5/24/2022, the average salary of a Mortgage Loan Officer is $103,751 per year before. With a near-unlimited earning potential on the horizon, let’s break down the typical pay structure for MLOs.

How Do Mortgage Loan Officers Make Money?

The way that Mortgage Loan Officers are paid will vary from office to office, depending on commission structure, fee splits, salary, bonuses, and benefits. If an MLO works for a financial institution, like a bank, they are more likely to be paid a salary and receive benefits. MLOs working for a state-licensed mortgage brokerage will most likely earn commission.

How Much Do Mortgage Loan Officers Make?

According to ZipRecruiter, Mortgage Loan Officer salaries below $50,000 (25th percentile) and above $200,000 (90th percentile) are outliers. The majority of MLOs (24%) make between $81,500 and $102,499.

The typical MLO is paid 1% of the loan amount in commission. On a $500,000 loan, a commission of $5,000 is paid to the brokerage, and the MLO will receive the percentage they have negotiated. If the portion of the commission for the MLO is 80%, they will receive $4,000 of the $5,000 brokerage percentage fee. Depending on the MLO’s involvement in the transaction, the percentage fee can range anywhere from 20-80%.

While some Mortgage Loan Officers are paid commission by percentages, others are paid by basis points. The Mortgage Reports says, "Each basis point is 1/100th of one percent, so 25 basis points, or bps, equals 1/4 of one percent. That’s $250 for a $100,000 mortgage."

Keep in mind: Mortgage Loan Officers are not allowed to be compensated based on the terms or conditions of the loan. This was made the law in 2008 with the enactment of the SAFE Act.

If you’re entering the industry and don’t know where to start regarding a compensation plan, check out this sample.

MLO Earning Potential

Your earning potential as a Mortgage Loan Officer can increase as you gain experience and develop your career with additional education. Other factors that will impact your earnings as an MLO include the state in which you do business and the fluctuation of the mortgage market. Around 16% of full-time MLOs make above the national average salary, earning up to $181,000 per year.

With unlimited earning potential and the chance to gain experience and education as you go, becoming a Mortgage Loan Officer can unlock a lucrative and stable career path.